Grab – Uber Deal May Violate Competition Rules In Singapore

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Uber and Grab made an announcement on Monday last week (read more here) that would see Uber retreating entirely from Southeast Asia and taking a stake in the former rival.

Uber Grab

Now, Singaporean watchdog has stated that this deal may have breached competition rules in the city state and ordered these two companies operate separately and not to share any pricing and other data while being investigated.

Here’s an excerpt from the Straits Times (access the piece here):

Singapore’s competition watchdog says it has grounds to suspect that Grab and Uber have infringed the Competition Act, and has proposed interim measures to preserve competition while it investigates their merger.

The measures, if implemented, will require Grab and its American ride-hailing rival Uber to maintain independent pricing, pricing policies and product options as they were before the sale.

Another measure requires that the companies do not obtain any confidential information about each other. This includes pricing, formulas, customers and drivers.

Conclusion

The main driver behind this deal was consolidation that would have given the crap Grab more pricing power and less need to offer incentives to both consumers and drivers. This merger will surely lead to higher prices for the consumers and worse service (there is none with Grab).

Apparently, both Malaysia and Philippines are probing too if the merger will affect their respective markets.

Competition is always good. Having only one player in the ride sharing space is not.

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